Contractor Who Ran Special Education Pre-K Programs Is Charged With Fraud

By EMMA G. FITZSIMMONS

November 7, 2013

A man who ran preschool programs for children in New York with developmental disabilities was arrested on Wednesday on charges that he diverted hundreds of thousands of dollars in government money meant to help the children to himself.

The man, Cheon Park, 46, of Manhasset, N.Y., was charged in federal court in Manhattan with mail fraud and conspiracy to commit mail fraud. Each count carries a maximum sentence of 20 years in prison.

The complaint alleges that Mr. Park intentionally inflated the amount of money paid to some employees and contractors and the type of work that they did. He aimed to increase the amount of public money the company received, and much of that money was kicked back to Mr. Park, the complaint said.

“Cheon Park allegedly orchestrated multiple schemes to enrich himself by taking funds intended for special needs children and diverting them into his own coffers,” Preet Bharara, the United States attorney for Manhattan, said in a statement. “As today’s arrest makes clear, we will not tolerate individuals who cheat local, state and federal government under the guise of helping children, and will do everything in our power to hold them accountable.”

Cheon Park was charged in federal court in Manhattan.

Niko J. Kallianiotis for The New York Times

Mr. Park, whose company, Bilingual SEIT, received about $94.5 million in federal, state and city funds to manage special education classes and other services out of five centers in Manhattan, Queens and Brooklyn from 2005 until 2012, has been under suspicion since at least 2011. In 2012, the New York State comptroller’s office found in an audit that the company had misused nearly $1.5 million over two years.

Mr. Park’s contracts were canceled by the city at the beginning of the 2012-13 school year after The New York Times questioned officials about the company. His success until then underscored how private contractors have taken advantage of the well-financed but poorly regulated segment of the special-education system, often called special ed pre-K, according to an investigation by The Times.

Mr. Park’s lawyer, Scott Hur, did not respond to requests for comment on Wednesday evening. In the past, Mr. Hur has said that Mr. Park cared deeply about children with disabilities, and that his schools provided excellent care. Mr. Hur has told The Times that Mr. Park had never cheated the program.

The special ed pre-K program provides services for 3- and 4-year-olds with developmental disabilities, including autism. Mr. Park spared no expense on his company’s centers, which included a lavish three-story building in Flushing, Queens, that had marble floors, red carpets and a chandelier, according to The Times’s investigation. In one case, according to the complaint, Mr. Park received kickback payments of $30,000 from someone the company agreed to pay $120,000 during the 2009-10 school year. In another case, it contends, Mr. Park asked for a kickback of $3,500 a month in cash from another person who was paid by the company between 2005 and 2008.

Mr. Park is also accused of paying his ex-wife and ex-sister-in-law for work they did not do. His ex-wife served as assistant executive director at the company, but witnesses said she did not perform those duties.

The complaint said that Mr. Park even used the company to pay for tutoring for his children and for an employee to clean his home twice a week.